Per recent study, the typical worker in the UK would have to work 52 years' worth of income to attain the financial standing of the most affluent 10% of the population.
Widening Financial Divide Across Decades
This research reviewed net worth data including the recent health crisis years and found that back in the mid-2000s, it would have needed nearly four decades of typical employment income to reach the wealthiest decile of the wealth distribution.
An economic expert part of the analysis stated: "Economic disparities in Britain are currently so significant that a typical full-time employee accumulating their complete salary throughout their career would continue to be incapable to achieve the peak of the economic scale."
Assessing the Economic Gap
The analysis found that the gap between the wealth of the typical individual and someone in the top 10% was £1m in the mid-2000s, but had increased to £1.3m in actual value by 2020-22.
The researcher further stated: "These gaps are especially alarming as wealth mobility in Britain is limited – people that start life affluent tend to stay wealthy, and vice versa."
Relative Wealth Inequality
Even with the economic divide widening in actual numbers, the share of complete net worth in the UK owned by the wealthiest families – called "relative wealth inequality" – has been "largely unchanged since the eighties," per the research.
During this period, complete net worth in the UK surged from thrice the gross domestic product, to nearly seven and a half times.
Contributors of Economic Disparity
Termed "automatic" increases, via rising house prices and adjustments to retirement fund assessments, were the main drivers of the expanding economic divide from 2010 onward, as stated in the report.
These appreciations generally flowed to older, property-owning households, the research shows – intensifying the intergenerational wealth divide.
Age-Based Wealth Disparities
The median economic difference between thirty-somethings and sixty-somethings more than doubled in real terms, from 135 thousand pounds in pre-financial crisis, to 310 thousand pounds.
Geographic Differences
There were also stark geographic differences, with the typical amount of assets in the pandemic period reaching £290,000 in the southeastern region, where housing costs have tended to rise rapidly, as opposed to £110,000 in the NE of England.
COVID Era Impact
Throughout the COVID period, when millions of workers were protected by the taxpayer-backed furlough scheme, and Covid shutdowns limited opportunities for spending, the information reveals countless homes were able to save, increasing their wealth.
Higher-income households achieved superior outcomes, though. "The average household in the bottom income bracket saw their liquid savings rise by merely £80 throughout the health crisis (across the pandemic timeframe), approximately equivalent to the pre-crisis period. On the other hand, the median home in the wealthiest fifth saw their available funds increase by £4,200," the report finds.
